IGW REIT is a private real estate investment trust and, through its affiliates, is the largest unitholder of Partners REIT, with 14.7% of the units. On May 9, 2013 it filed a proxy circular with securities regulators providing reasons why four trustees of Partners REIT should be removed and replaced by four highly experienced real estate executives IGW REIT has nominated for election to the Board of Trustees at Partners' annual meeting scheduled for June 6, 2013.

"The Incumbent Trustees' letter is simply a malicious attempt to discredit the efforts and achievements of the manager," said Adam Gant, Trustee and President of IGW REIT. "We are confident that our fellow unitholders will recognize it as a desperate attempt by the Incumbent Trustees to entrench themselves, which is not in the best interests of Partners REIT. The decision facing unitholders is about the future growth of their REIT. It is certainly not about fees."

FACT: The non-management Incumbent Trustees' attempt to question the track record of the manager, LAPP Global Asset Management Corp. (LAPP), is not credible. The manager has achieved great success for Partners in the 33 months since it took over. The REIT has increased its asset base by more than 400% and delivered earnings of more than $48 million. It has provided unitholders with an aggregate total return of 97%, outperforming both the S&P TSX and the S&P TSX REIT Index, while seeing an increase in unit price of more than 54%. These results have been achieved by the efforts of the more than 30 members of the professional staff of the manager who have demonstrated their commitment to Partners' growth, prosperity and the increase in value for all unitholders.

FACT: IGW owns LAPP which was paid a management fee of $1.5 million in 2012, an amount that does not cover its costs. These fees help pay the employment costs of all those acting as manager of the REIT, including the CEO, COO, CFO and CIO. They are not direct profit to IGW. LAPP was paid just under $1 million in acquisition fees in 2012 which were approved by the Board for acquisitions that were accretive to Partners' unitholders and increased the quality and diversification of the portfolio. These fees are set at 0.5% of transaction value; below average market rates.

FACT: IGW's primary focus is in increasing the value of its investment in Partners REIT, not maintaining the fees paid to LAPP. With $28 million invested in Partners, IGW receives more income from Partners' distributions than from annual management fees. A 5% increase in the unit price of the REIT is far more valuable to IGW than the fees. Growth and value at Partners is IGW's only incentive.

FACT: The Incumbent Trustees never discussed internalization with the manager until after IGW advised them it would not vote for the re-election of Louis Maroun because of his conflict of interest and divergent views on the future of the REIT. The statement by the Incumbent Trustees in their May 16 letter that this was discussed earlier is flatly contradicted in The Globe and Mail (online) on May 7, 2013: "Mr. van Haastrecht confirmed that management wasn't aware of the internalization plans."

FACT: IGW has publicly stated that it supports internalizing management at Partners. The internalization clause in the management agreement, now being used by the Incumbent Trustees, was added with the full agreement of IGW. There is no disagreement about internalization; only about how and when.

FACT: The Incumbent Trustees want to change management, not internalize it. They want to replace a successful manager with a team that does not yet exist.

FACT: In addition to delivering strong financial performance, LAPP has spent more than two years developing important vendor relationships and creating a pipeline of potential acquisitions for Partners. That will be lost, and would be difficult to replicate, if the Incumbent Trustees pursue their ill-conceived internalization decision.

FACT: While the Incumbent Trustees claim to "have played a significant role in the supervision and direction" of the manager, the reality is the Incumbent Trustees have provided little to no strategic or operational input to the manager, nor have they provided any assistance identifying acquisition opportunities. In addition, the Trustees have specifically stated that they objected to management even considering the prospect of mergers & acquisitions transactions. During this time, the Incumbent Trustees may have been distracted by other business ventures, especially Mr. Maroun's launch of Summit Industrial Income REIT, where he is also Chair and where he owns the external manager - which cannot be internalized.

FACT: The timing of the Incumbent Trustees' decision is wrong. Internalization now does not make economic sense given Partners' size. It is generally agreed in the industry that the threshold for internalization is over $750 million in market capitalization. Partners is currently at less than $200 million. LAPP commits to consult with the new Board immediately after the Partners' annual meeting and begin to formulate a plan for internalization that does make sense for when the REIT achieves larger scale.

FACT: Assembling and maintaining an internal management team will cost Partners unitholders more - not less. Even without including the legal, recruiting, and other costs of the transition, it is extremely unlikely that a publicly traded REIT can operate effectively for less than $1.5 million a year.

FACT: The Incumbent Trustees have not indicated when internal management will be in place or who would be on the team, or what they may actually cost. All they have disclosed is that responsibility for assembling the team has been given to trustee John van Haastrecht. Longer-term unitholders will remember Mr. van Haastrecht is the only trustee left from the original board that oversaw the collapse of Partners' unit price from $15.04 to $5.30 - a loss of value of more than 67% before LAPP stepped in to reverse it.

FACT: LAPP and IGW are committed to continue following best practices should any related party transactions occur as a result of their involvement in the management of Partners REIT. They recognize that "vending-in" of assets is widely recognized as a preferred, low-cost avenue to growth, but it requires a board that is prepared to take responsibility for overseeing those transactions. The independent IGW nominees are prepared to do that.

FACT: The claim of "inappropriate behaviour" by the manager is false. The Incumbent Trustees have misrepresented events. At no point has LAPP withheld information or provided misinformation to the Trustees in an attempt to benefit its interests or those of its affiliates. LAPP and IGW have made extra efforts to protect Partners unitholders, even going as far as to provide guarantees that allowed Partners to complete beneficial transactions. LAPP and IGW believe it is the manager's responsibility to add value to Partners by examining and developing growth opportunities to be considered by the Board. Other unitholders share this belief. The Incumbent Trustees seem to be opposed to growth and value enhancement opportunities at Partners and have attempted to freeze acquisitions. Many valuable opportunities were lost to unitholders because of the Incumbent Trustees' lack of vision and intransigence. The manager was acting in the best interests of Partners. The Incumbent Trustees were not.

FACT: IGW is the major investor in Partners and is acting for the benefit of other unitholders, as well as itself. The internal structure of IGW is irrelevant to the future of Partners. Further, the Incumbent Trustees' attempt to smear IGW and its principals simply betrays desperation and a startling ignorance about how private REITs work.

FACT: The Incumbent Trustees cannot rival the experience of IGW's nominees in retail real estate management, which is far different and far more complex than industrial real estate. IGW's nominees include three independent, highly qualified, and experienced real estate executives: James R. Bullock, former Chief Executive Officer of Cadillac Fairview Corporation; Graham Senst, former Vice President of Real Estate for OMERS Administration Corp.; and, Wilbur H. Smith III Principal/CEO and founder of Greenlaw Partners, LLC and Greenlaw Management Inc. IGW and LAPP have had no prior business with them. There is no relationship that could call their independence into question. The fourth nominee is Patrick Miniutti, the Chief Executive of Partners REIT, who is similarly qualified and experienced and represents the manager, LAPP Global Asset Management Corp. This group has more than 100 years of experience in a wide range of real estate management, particularly retail real estate. The Incumbent Trustees do not compare.

IGW asks all Partners unitholders to review its circular and vote to keep the REIT on track to greater value using the GOLD form of proxy or voting instruction form.

Make the Right Decision. For the Right Reason. Vote for the Right People.

How to Vote the GOLD Proxy

Unitholders are advised to use the GOLD form of proxy or voting information form (VIF) enclosed with the circular to vote FOR the four IWG nominees and to discard the Blue proxy sent by Partners REIT.
Time is short since the annual meeting is on June 6, 2013 and, in order to be counted at the meeting, GOLD proxies and VIFs must be received by 10:30 a.m. (Eastern Time) on June 4.

If they have already voted using the Blue proxy, unitholders can still use the GOLD proxy or VIF which revoke the previous vote. It is only the last proxy or VIF that is submitted that is counted at the meeting.

About IGW REIT

IGW REIT is a Canadian private real estate investment trust founded in 2007. With over $280 million in assets, IGW REIT invests in commercial real estate, mortgages and units of publicly traded REITs. In addition to being the largest single unitholder of Partners REIT, IGW REIT also owns commercial properties in British Columbia, Alberta, Ontario and Quebec, and has a portfolio of mortgages of just under $100 million dollars.